Sterling strengthened by close to 1% against USD and slightly less against EUR when news of the confidence vote came in yesterday morning. However, that strength dissipated over the course of the day, until the narrow Johnson victory came in at 9pm and the decline has been steep.
Amidst all the political news yesterday, UK new car sales fell to their lowest May result since 1992. This morning we have heard that retail sales in the UK fell by 1.5% compared to last May.
Later this morning there will be a final reading for services and construction PMI, which in their ‘flash’ reading were recorded as falling severely from April to May.
Tomorrow we’ll get the Halifax House Price index which last month rose by 1.1%. This is not predicted to be repeated for May, however.
There is also the possibility of more political developments, and the risk that the currency markets see a threat from the increased likelihood of a Labour Party victory – or coalition government – at the next election.
